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Wednesday, 4 June 2008

UN Secretary General Ban Ki-moon says $15-20 billion a year needs to be invested to overcome the global food crisis.

Mr Ban was speaking at a Rome UN summit which also heard a top UN offiicial call for developed countries to lower trade barriers and remove export bans to help fight the looming food crisis.

"Nothing is more degrading than hunger, especially when man-made," Mr Ban told world leaders who are likely to disagree over the link between biofuel production and high food prices.

The head of the UN's Food and Agriculture Organisation (FAO), which is hosting the summit, said wealthy nations had been spending billions of dollars on farm subsidies, wasteful and excess consumption of food, and on arms.

"The excess consumption by the world's obese costs $20 billion annually, to which must be added indirect costs of $100 billion resulting from premature death and related diseases," said FAO Director General Jacques Diouf, who is from Senegal.

The World Bank and aid agencies estimate soaring food prices could push as many as 100 million more people into hunger. About 850 million are already hungry.

Mr Ban estimated the "global price tag" to overcome the food crisis would be $15-20 billion a year and that food supply had to rise 50 per cent by the year 2030 to meet climbing demand.

"Some countries have taken action by limiting exports or by imposing draft controls," he said. This "distorts markets and forces prices even higher. I call on nations to resist such measures and to immediately release exports designated for humanitarian purposes".

Aid agencies say Japan and China have contributed to high rice prices, which have triggered riots as far away as Haiti, by controlling their stocks. Japanese Prime Minister Yasuo Fukuda promised to release at least 300,000 tonnes of imported rice.

The Rome summit will set the tone on food aid and subsidies for the Group of Eight summit in Japan in July and what is regarded as the concluding stages of the stalled talks under the World Trade Organisation aimed at reducing trade distortions.

A British minister urged the European Union to help reduce prices by reforming farm policies that cost consumers more than 40 billion euros ($64.8 billion) a year and suspending some food import tariffs.

"I do not see how Europe can justify keeping EU prices so much higher than world market levels at a time when people across Europe are really feeling the pinch," said Treasury minister Yvette Cooper.

Food to fuel

The cost of major food commodities has doubled over the last couple of years, with rice, corn and wheat at record highs. This has provoked protests and riots in some developing countries where people may spend more than half their income on food.

The OECD sees prices retreating from their current peaks but still up to 50 per cent higher in the coming decade. OECD chief Angel Gurria said in Paris that oil prices, "which are part and parcel of food prices", would not ease sharply either.

That has increased interest in biofuels, blamed by many for competing with food output for grains and oilseed. The United States and Brazil, the world's biggest producer of ethanol from sugar cane, defended biofuels from such accusations in Rome.

The United States plans to channel a quarter of its maize crop into ethanol production by 2022 and the European Union plans to get 10 per cent of auto fuel from bio-energy by 2020.

Biofuel producers wrote to the summit urging energy sources to be diversified when "a highly constrained supply of crude oil and petroleum products is wreaking havoc on all countries and markets across the globe, especially with respect to food".

US agriculture secretary Ed Shafer says biofuels account for only 3 per cent of the total food price rise while the charity Oxfam said it was closer to 30 per cent.

"Subsidies create dependency, breakdown entire production systems and provoke hunger and poverty where there could be prosperity. It is past time to do away with them," he said.

A distraction from food at the summit was the presence of Zimbabwe's Robert Mugabe and Iran's Mahmood Ahmadinejad, on his first trip to the European Union. Critics accuse both of contributing to food shortages at home.